How Collaboration Fueled Launch of BNY Mellon’s New Payments Infrastructure

Analysis of bank strategies to improve customer experience generally focus on consumers, but experience matters for business customers, as well. In fact, in the highly competitive treasury services space -- where today's differentiating features are likely to be commoditized tomorrow -- the ability to enable a consistently excellent experience is a significant competitive advantage.

Accordingly, BNY Mellon recently launched a new global payments infrastructure the company says "is designed to deliver significantly enhanced levels of processing efficiency, reliability, transparency and cash management oversight." The launch is significant not only because it represents ongoing investment in the global payments infrastructure, but also because it is based on an open, services-oriented architecture and was developed in a collaborative partnership among "product partners, business and technology," reports Saket Sharma, CIO of BNY Mellon's Treasury Services group. The focus was on creating solutions that address client needs and provide a positive experience, he adds.

This kind of collaborative approach represents a cultural change at BNY Mellon, Sharma notes. "We believe technology is a key integral part of the services and products we produce and deploy in the market," he says, adding there is "very strong collaboration with our product and service partners."

The new infrastructure should offer BNY Mellon and its customers numerous benefits, including:

Operational efficiency

Continuous process improvement

Faster time to market

Value to clients

The opportunity to enter new markets

The term "infrastructure" does not fully describe the scope of this effort, Sharma says. "We are really creating a payment system, not an infrastructure -- an ecosystem." It reflects an attempt to address the evolving regulatory and economic conditions in the marketplace. "The ever-changing market conditions are driving lot of financial institutions to think about differently … when looking at payments [and] how we serve our client," he says. This involves "better service, product leadership, and value. At end of day, if we do all things right, we are actually creating value. The product we develop and the solutions we provide really add value from a client perspective."

The SOA foundation, along with agile product development methodologies, will enable BNY Mellon to take a plug-and-play approach to creating new products or updating offerings in response to market developments, Sharma says. But rather than a series of "one-off" projects, this is more about continuous improvement – an ongoing process of new features and enhancements implemented in response to market changes and client needs. "There is no such product as a perfect product," Sharma says. "We need to build the product for the client." Something like a liquidity management tool needs to be conceived in terms of, "How do we manage it, what would it require, what are [the client's] pain points, what could be better way to do it?" -- and then addressed "through a joint collaboration effort – at the end of day, we want a solution that is effective, efficient and adds value.

"Rolling out a payment ecosystem itself is a challenging task," Sharma continues. "It's a work in progress" that includes identifying client needs and getting client feedback.

One thing that is in high demand today is the ability to gain insights from transaction and performance data, and BNY Mellon's payments infrastructure is geared toward enabling that, Sharma reports. "Analytics is taking a key part of every process we do today," he says. "We want to make sure we can provide meaningful insights to operational users and clients. This is something we've tried to do as part of the ecosystem."

Another goal is to facility greater transparency into payments and related transactions, something that has been elusive in legacy payments environments. "This is something the industry is heading towards," Sharma notes. "Clients are seeing the value of having that power in their hands. We want to hand that control over to them."

The new infrastructure, which went live in January for BNY Mellon's clearing service clients, is focused initially on Euro clearing capabilities. What products or functionality will be set up next is in the process of being determined in conjunctions with the bank's operations team, according to Sharma. In a press release, Brian Shea, president, BNY Mellon's Investment Services, and head of Client Service Delivery and Client Technology Solutions, noted, "We're using the same [collaborative] approach to develop client solutions that include enhanced payment and fund transfer features. We're also focused on leveraging the full range of BNY Mellon's investment services capabilities -- especially in areas like custody, accounting, market data and information management, data analytics, and cash and liquidity management -- to make our Treasury Services solutions even more responsive to our clients' needs."

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio

Good point. I think in treasury services/corporate payments the focus has been on operational efficiency, competitive pricing, somewhat new products but in such a competitive space it's been more about helping corporate clients do things more efficiently at the lowest price. That's nor really a competitive diffferentiator. So I agree that the analytics capabilities hold a lot of potential to help BNY Mellon develop more insights that can lead to innovation -- or at least a more customized, real-time customer experience.

As noted, innovation, especially in the payments space, is perhaps not at the same level in treasury services a sin consumer banking. Banks can really differentiate themselves in this market with services such as this. Sharma's comment about analytics and gleaning insight from transaction data is also interesting, and is something companies really need to do, if they aren't already.